52 Impact Minerals Ltd Annual Report 2023 Notes to the Consolidated Financial Statements continued NOTE 10: FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (CONTINUED) The Group classifies its financial assets as either financial assets at fair value though profit or loss (“FVPL”), fair value though other comprehensive income (“FVOCI”) or at amortised cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For investments in equity instruments, the classification depends on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at FVPL or FVOCI. Financial assets at FVOCI For assets measured at FVOCI, gains and losses will be recorded in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments is established. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value. The Group has elected to measure its listed equities at FVOCI. Assets in this category are subsequently measured at fair value. The fair values of quoted investments are based on current bid prices in an active market. NOTE 11: EXPLORATION AND EVALUATION Consolidated 2023 $ 2022 $ Opening balance 11,195,288 11,993,262 Exploration expenditure incurred during the year 3,640,557 3,939,357 Sale of the Blackridge Project – (475,420) Hopetoun Project (994,601) – Sale of 75% interest in the Commonwealth Project – (3,140,000) Broken Hill Project (4,000,000) – Impairment expense(1) (273,205) (1,121,911) Closing balance 9,568,039 11,195,288 (1) Impairment expense in the Consolidated Statement of Profit or Loss includes an additional write down of Assets Held for Sale of $205,429 on the Commonwealth Project (refer Note 9). Total impairment expense of $5,473,236 The Hopetoun Project was a joint venture with a private company in which Impact was earning an 80% interest. A significant drill programme was completed to test priority targets in early to mid-2023 as part of an option to proceed to a full joint venture agreement. No significant results were returned from the programme and Impact elected not to proceed to the full joint venture. IGO Limited (ASX:IGO) withdrew from the joint venture at Broken Hill following poor drill results and having covered a significant part of the area prospective for nickel-copper-PGM mineralisation with a ground electromagnetic survey. The joint venture area comprised a small portion of the total Broken Hill project area. Accordingly a write down of $4 Million was booked against the project. Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in the Statement of Profit or Loss and Other Comprehensive Income.
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